If there’s even the slightest chance you’ll overdraw your account, it might be a good idea to look into signing up for overdraft protection. Many banks offer the overdraft protection transfer service to offset the hefty overdraft fee that customers incur once they charge a purchase larger than their available balance.

torbakhopper / Flickr | http://www.flickr.com/photos/gazeronly/8645970418/

torbakhopper / Flickr source

Customers can link their savings accounts or credit cards to their checking. If they do overdraw on their balance, money from either accounts can be transferred over to their checking accounts to cover the purchase. The banks will charge a fee for transferring funds over, but the fee is less than a regular overdraft fee.

For banks that offer linking credit cards with checking accounts, there might be a yearly membership fee, but it varies among states and banks, so make sure to inquire with your local bank about fee specifics.

You can find below the overdraft protection transfer fees for the biggest banks in America.

Bank of America$10
Wells Fargo$12.50
U.S. Bank$12.50
Capital One$10 ($25 annual fee if account is linked to credit card)
TD Bank$10
PNC Bank$10

These fees are for the state of New York, and most banks have consistent fees across the country, but always make sure by checking with your bank. Fees are usually found under the Checking Account sections on a bank’s site.

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  • ChuckBiscuits

    This is definitely better than an overdraft fee. However, as of 2010 (http://www.occ.gov/news-issuances/bulletins/2010/bulletin-2010-15.html), customers must opt-in to allow an institution to approve a transaction that exceeds their available funds and thus incur an overdraft fee (with the exception of automatic recurring payments). I, and most sane people, would never opt-in to this. I would much rather my transaction be denied if I don’t have the money to cover it, rather than pay a huge fee. So, the financial institutions came up with this. They won’t tell you about the transfer fee (it’s in the fine print, though). They just tell you you can set up an account to transfer money over if you overdraw. I signed up thinking, I probably won’t overdraw my account, but everyone makes mistakes, why not. Well, if I had not signed up for this, the transaction would have been declined and I could have put it on a credit card and it wouldn’t have cost me $12.50. Bottom line, it’s a fee to keep you from having to pay a larger fee (which is pretty much arbitrary anyway).